Head to Head Analysis: Centene Corporation (CNC) and UnitedHealth Group (UNH)

Centene Corporation (NYSE: CNC) and UnitedHealth Group (NYSE:UNH) are both large-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.

Insider & Institutional Ownership

92.3% of Centene Corporation shares are owned by institutional investors. Comparatively, 86.2% of UnitedHealth Group shares are owned by institutional investors. 3.0% of Centene Corporation shares are owned by insiders. Comparatively, 0.9% of UnitedHealth Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

UnitedHealth Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.5%. Centene Corporation does not pay a dividend. UnitedHealth Group pays out 35.1% of its earnings in the form of a dividend. UnitedHealth Group has raised its dividend for 7 consecutive years.

Profitability

This table compares Centene Corporation and UnitedHealth Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Centene Corporation 1.72% 14.62% 4.24%
UnitedHealth Group 4.32% 21.52% 6.81%

Valuation & Earnings

This table compares Centene Corporation and UnitedHealth Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Centene Corporation $43.65 billion 0.38 $2.19 billion $4.55 21.09
UnitedHealth Group $192.60 billion 1.00 $15.57 billion $8.54 23.24

UnitedHealth Group has higher revenue and earnings than Centene Corporation. Centene Corporation is trading at a lower price-to-earnings ratio than UnitedHealth Group, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Centene Corporation has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, UnitedHealth Group has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Centene Corporation and UnitedHealth Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Centene Corporation 1 4 12 0 2.65
UnitedHealth Group 0 0 21 0 3.00

Centene Corporation presently has a consensus price target of $91.07, suggesting a potential downside of 5.12%. UnitedHealth Group has a consensus price target of $203.20, suggesting a potential upside of 2.40%. Given UnitedHealth Group’s stronger consensus rating and higher probable upside, analysts plainly believe UnitedHealth Group is more favorable than Centene Corporation.

Summary

UnitedHealth Group beats Centene Corporation on 13 of the 16 factors compared between the two stocks.

Centene Corporation Company Profile

Centene Corporation is a healthcare company. The Company provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. The Company operates through two segments: Managed Care and Specialty Services. The Company’s Managed Care segment provides health plan coverage to individuals, through government subsidized programs, including Medicaid, the State Children’s Health Insurance Program (CHIP), Long Term Care, Foster Care, dual-eligible individuals (Duals) and the Supplemental Security Income Program, also known as the Aged, Blind or Disabled Program (ABD), Medicare, and Health Insurance Marketplace. Its Specialty Services segment consists of its specialty companies offering a range of healthcare services and products to state programs, correctional facilities, healthcare organizations, employer groups and other commercial organizations, as well as to its own subsidiaries.

UnitedHealth Group Company Profile

UnitedHealth Group Incorporated is a health and well-being company. The Company operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. It conducts its operations through two business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum. UnitedHealthcare provides healthcare benefits to an array of customers and markets, and includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global businesses. Optum is a health services business serving the healthcare marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. OptumInsight provides services, technology and healthcare solutions to participants in the healthcare industry. OptumRx provides retail network contracting, purchasing and clinical solutions.

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